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Stock options offer - questions employer should answer
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When evaluating a stock option offer at privately-held start-up company, what questions re. the options plan the employer should be able to answer? What is really a private information that cannot be disclosed and what is just a trick to avoid disclosing the information that could help to evaluate the offer?
EDIT: the offer includes cliff, vesting schedule, number of options given, strike price.
job-offer startup
asked Apr 17 '14 at 18:51
Asahi
7051816
add a comment |Â
up vote
1
down vote
favorite
When evaluating a stock option offer at privately-held start-up company, what questions re. the options plan the employer should be able to answer? What is really a private information that cannot be disclosed and what is just a trick to avoid disclosing the information that could help to evaluate the offer?
EDIT: the offer includes cliff, vesting schedule, number of options given, strike price.
job-offer startup
asked Apr 17 '14 at 18:51
Asahi
7051816
1
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
When evaluating a stock option offer at privately-held start-up company, what questions re. the options plan the employer should be able to answer? What is really a private information that cannot be disclosed and what is just a trick to avoid disclosing the information that could help to evaluate the offer?
EDIT: the offer includes cliff, vesting schedule, number of options given, strike price.
job-offer startup
asked Apr 17 '14 at 18:51
Asahi
7051816
When evaluating a stock option offer at privately-held start-up company, what questions re. the options plan the employer should be able to answer? What is really a private information that cannot be disclosed and what is just a trick to avoid disclosing the information that could help to evaluate the offer?
EDIT: the offer includes cliff, vesting schedule, number of options given, strike price.
job-offer startup
asked Apr 17 '14 at 18:51
Asahi
7051816
edited Apr 17 '14 at 19:17
asked Apr 17 '14 at 18:51
Asahi
7051816
asked Apr 17 '14 at 18:51
Asahi
7051816
asked Apr 17 '14 at 18:51
Asahi
7051816
7051816
1
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50
add a comment |Â
1
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50
1
1
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
0
down vote
accepted
You need to know the total number of shares, or the percentage of the company that your options represent, the option price or current value of the company and the vesting.
This doesn't stop you being ripped off in the future, there are so many ways of being ripped off in share options that you just factor that into the same risk that of the company suceeding.
But if the employer doesn't state what proportion the options represent, the price and the vesting then they are either stupid or crooked.
answered Apr 18 '14 at 3:59
NobodySpecial
788511
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
add a comment |Â
up vote
1
down vote
I would make sure you know the following when trying to understand the value of the options:
- Total Fully Diluted shares outstanding;
- Price of last Preferred Round;
- Strike Price of the Options (often this will be the 409a valuation of the common stock). I would ask them if they get an independent
409a valuation; - The company's policy for option refresh. Some companies will refresh only when you are finished vesting, others will refresh every
two years etc. Will be helpful as you think about the equity
possibilities for the job.
edited Apr 18 '14 at 22:13
Asahi
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
add a comment |Â
up vote
0
down vote
I was in this position recently with a startup that I had applied to work at. I enquired about the options and they were happy to offer all the info I wanted. In short they made me sign some NDA or something like that and they then send me a HUGE packet of info. It included everything I could have ever asked, it was supposedly prepared for some of the investors that held big steaks in the startup but it had all the data I was looking for none the less. Some companies may not be as transparent as this but I would avoid places that try to keep this stuff under the rug.
answered Apr 18 '14 at 14:21
Dave
73459
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
add a comment |Â
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3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
0
down vote
accepted
You need to know the total number of shares, or the percentage of the company that your options represent, the option price or current value of the company and the vesting.
This doesn't stop you being ripped off in the future, there are so many ways of being ripped off in share options that you just factor that into the same risk that of the company suceeding.
But if the employer doesn't state what proportion the options represent, the price and the vesting then they are either stupid or crooked.
answered Apr 18 '14 at 3:59
NobodySpecial
788511
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
add a comment |Â
up vote
0
down vote
accepted
You need to know the total number of shares, or the percentage of the company that your options represent, the option price or current value of the company and the vesting.
This doesn't stop you being ripped off in the future, there are so many ways of being ripped off in share options that you just factor that into the same risk that of the company suceeding.
But if the employer doesn't state what proportion the options represent, the price and the vesting then they are either stupid or crooked.
answered Apr 18 '14 at 3:59
NobodySpecial
788511
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
add a comment |Â
up vote
0
down vote
accepted
up vote
0
down vote
accepted
You need to know the total number of shares, or the percentage of the company that your options represent, the option price or current value of the company and the vesting.
This doesn't stop you being ripped off in the future, there are so many ways of being ripped off in share options that you just factor that into the same risk that of the company suceeding.
But if the employer doesn't state what proportion the options represent, the price and the vesting then they are either stupid or crooked.
answered Apr 18 '14 at 3:59
NobodySpecial
788511
You need to know the total number of shares, or the percentage of the company that your options represent, the option price or current value of the company and the vesting.
This doesn't stop you being ripped off in the future, there are so many ways of being ripped off in share options that you just factor that into the same risk that of the company suceeding.
But if the employer doesn't state what proportion the options represent, the price and the vesting then they are either stupid or crooked.
answered Apr 18 '14 at 3:59
NobodySpecial
788511
answered Apr 18 '14 at 3:59
NobodySpecial
788511
answered Apr 18 '14 at 3:59
NobodySpecial
788511
answered Apr 18 '14 at 3:59
NobodySpecial
788511
788511
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
add a comment |Â
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
Any chance that these numbers are "private" information which cannot be disclosed by the employer?
– Asahi
Apr 18 '14 at 6:15
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
I understand that. What I am asking is whether there is a reason for them not to disclose (other then keep me uninformed).
– Asahi
Apr 18 '14 at 18:19
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
@Asahi - not a legitimate one if you are under NDA. They would have to tell you as soon as you are hired, at which point you would just quit.
– NobodySpecial
Apr 18 '14 at 18:33
1
1
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
@Asahi - No, the information would not generally be private. In general, when a company wants to issue shares they have to make a filing with the relevant corporate governing agency (and the filing will include the relevant numbers). The filing becomes a matter of public record. Your mileage may vary depending upon location, but I can't personally think of any place where this is not the case.
– aroth
Apr 19 '14 at 0:20
add a comment |Â
up vote
1
down vote
I would make sure you know the following when trying to understand the value of the options:
- Total Fully Diluted shares outstanding;
- Price of last Preferred Round;
- Strike Price of the Options (often this will be the 409a valuation of the common stock). I would ask them if they get an independent
409a valuation; - The company's policy for option refresh. Some companies will refresh only when you are finished vesting, others will refresh every
two years etc. Will be helpful as you think about the equity
possibilities for the job.
edited Apr 18 '14 at 22:13
Asahi
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
add a comment |Â
up vote
1
down vote
I would make sure you know the following when trying to understand the value of the options:
- Total Fully Diluted shares outstanding;
- Price of last Preferred Round;
- Strike Price of the Options (often this will be the 409a valuation of the common stock). I would ask them if they get an independent
409a valuation; - The company's policy for option refresh. Some companies will refresh only when you are finished vesting, others will refresh every
two years etc. Will be helpful as you think about the equity
possibilities for the job.
edited Apr 18 '14 at 22:13
Asahi
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
add a comment |Â
up vote
1
down vote
up vote
1
down vote
I would make sure you know the following when trying to understand the value of the options:
- Total Fully Diluted shares outstanding;
- Price of last Preferred Round;
- Strike Price of the Options (often this will be the 409a valuation of the common stock). I would ask them if they get an independent
409a valuation; - The company's policy for option refresh. Some companies will refresh only when you are finished vesting, others will refresh every
two years etc. Will be helpful as you think about the equity
possibilities for the job.
edited Apr 18 '14 at 22:13
Asahi
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
I would make sure you know the following when trying to understand the value of the options:
- Total Fully Diluted shares outstanding;
- Price of last Preferred Round;
- Strike Price of the Options (often this will be the 409a valuation of the common stock). I would ask them if they get an independent
409a valuation; - The company's policy for option refresh. Some companies will refresh only when you are finished vesting, others will refresh every
two years etc. Will be helpful as you think about the equity
possibilities for the job.
edited Apr 18 '14 at 22:13
Asahi
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
edited Apr 18 '14 at 22:13
Asahi
7051816
edited Apr 18 '14 at 22:13
Asahi
7051816
edited Apr 18 '14 at 22:13
Asahi
7051816
7051816
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
answered Apr 18 '14 at 19:51
Jack Sinclair
781410
781410
add a comment |Â
add a comment |Â
up vote
0
down vote
I was in this position recently with a startup that I had applied to work at. I enquired about the options and they were happy to offer all the info I wanted. In short they made me sign some NDA or something like that and they then send me a HUGE packet of info. It included everything I could have ever asked, it was supposedly prepared for some of the investors that held big steaks in the startup but it had all the data I was looking for none the less. Some companies may not be as transparent as this but I would avoid places that try to keep this stuff under the rug.
answered Apr 18 '14 at 14:21
Dave
73459
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
add a comment |Â
up vote
0
down vote
I was in this position recently with a startup that I had applied to work at. I enquired about the options and they were happy to offer all the info I wanted. In short they made me sign some NDA or something like that and they then send me a HUGE packet of info. It included everything I could have ever asked, it was supposedly prepared for some of the investors that held big steaks in the startup but it had all the data I was looking for none the less. Some companies may not be as transparent as this but I would avoid places that try to keep this stuff under the rug.
answered Apr 18 '14 at 14:21
Dave
73459
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
add a comment |Â
up vote
0
down vote
up vote
0
down vote
I was in this position recently with a startup that I had applied to work at. I enquired about the options and they were happy to offer all the info I wanted. In short they made me sign some NDA or something like that and they then send me a HUGE packet of info. It included everything I could have ever asked, it was supposedly prepared for some of the investors that held big steaks in the startup but it had all the data I was looking for none the less. Some companies may not be as transparent as this but I would avoid places that try to keep this stuff under the rug.
answered Apr 18 '14 at 14:21
Dave
73459
I was in this position recently with a startup that I had applied to work at. I enquired about the options and they were happy to offer all the info I wanted. In short they made me sign some NDA or something like that and they then send me a HUGE packet of info. It included everything I could have ever asked, it was supposedly prepared for some of the investors that held big steaks in the startup but it had all the data I was looking for none the less. Some companies may not be as transparent as this but I would avoid places that try to keep this stuff under the rug.
answered Apr 18 '14 at 14:21
Dave
73459
answered Apr 18 '14 at 14:21
Dave
73459
answered Apr 18 '14 at 14:21
Dave
73459
answered Apr 18 '14 at 14:21
Dave
73459
73459
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
add a comment |Â
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
Thanks. Where is the company located?
– Asahi
Apr 18 '14 at 18:10
add a comment |Â
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1
Please explain the downvote
– Asahi
Apr 17 '14 at 21:50